The resale renaissance is still going strong—and one of the industry’s biggest players is making moves.
On Wednesday, online fashion resale platform ThredUp announced that it is taking steps to go public. The Bay Area company confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission (SEC) regarding a proposed initial public offering (IPO) for its Class A common stock.
While details like the pricing and number of shares have yet to be determined, the company said that the IPO is expected to move forward pending the SEC’s review process. If the IPO is successful, ThredUp would join fellow Bay Area startup The RealReal as a publicly traded secondhand marketplace.
The resale marketplace has also expanded its product offerings in recent weeks. In early October, ThredUp announced a strategic partnership with premium and luxury apparel rental service Rent the Runway. In an effort to promote a circular fashion economy, ThredUp now offers rented wares that have passed their prime for sale at drastically reduced prices.
While the term “retail apocalypse” has never seemed more apt than in a year plagued by, well, a plague, ThredUp’s annual resale report revealed that online resale is poised to grow by 23 percent from 2019.
And according to Paris-based pre-owned fashion platform Vestiaire Collective and Boston Consulting Group, that trend is slated to continue.
The resale market, currently estimated to be worth between $30-$40 billion, could see a compound annual growth rate of 15 to 20 percent globally over the course of the next five years, according to a study published by the digital resaler and consulting firm. In more developed markets, that number could be exponentially higher: up to 100 percent year-over-year growth.
Shoppers are flocking to secondhand channels in droves, and they’re also buying used clothing in larger quantities, the report said. This confluence of developments stands to push the share of secondhand clothing in shoppers’ closets from 21 percent to 27 percent by 2023.
While there are plenty of reasons that savvy shoppers might gravitate toward resale—affordability, greater selection, and access to unique items, to name a few—the survey showed that growing environmental awareness has also contributed to consumers’ desires to keep clothing in rotation and out of landfills.
That increased climate consciousness has been underscored by the pandemic, respondents said. In 2020, 70 percent of shoppers feel compelled to browse and buy pre-owned apparel and footwear in an effort to shop more sustainably, up from 62 percent in 2018.
Notably, the report also revealed a shift away from the fast-fashion lifestyle many shoppers had adopted over the past two decades. Now, they are looking to own fewer, higher-quality pieces to reduce their overall consumption (85 percent), and to take better care of the items they already own (70 percent), analysts said.
And there’s real evidence that the secondhand market has saved items from a landfill fate. Three-fifths of respondents said they would not have been able to give their unwanted items a second life without it.
Consumers are looking for brands to step up to the plate and do more to help them achieve their sustainability goals, evidenced by the fact that 62 percent said they would be more willing to buy from brands that partner with secondhand players, as names like Frame Denim, Madewell and J. C. Penney have done. Brands should be arbiters of change, they argued, with 60 percent expressing a desire to buy from purpose-led organizations.
The growing role of resale marketplaces in the retail landscape is also helpful for brand discovery. Nearly half (48 percent) of survey respondents said they purchased a brand that was new to them through a secondhand channel over the course of the past year, and would consider making a repeat purchase from the same brand based on that experience.
The secondhand model also encourages customer retention, as sellers often buy used items with the money earned from the sale of their own pre-owned wares. Almost one-third (31 percent) of re-sellers use their earnings to fund further resale purchases.
With 69 percent of survey respondents saying they’d be willing to buy more pre-owned apparel and footwear moving forward, analysts said the market “looks poised to address consumers’ growing desire for wardrobes that are unique, of good value, and sustainable.”